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| | | Cliff Rally | | | The market had quite a rally last week – didn’t it? It actually started the prior Friday on the 16th of November, near 1340.00 in the ES. What happened? John Boehner held a press conference about the “fiscal cliff” negotiations in which he suggested that said negotiations were going well. Naturally, Fraud Street took this to mean that the massive deficit-can would be kicked into next year yet again, when we will go through this all over. A week later the ES traded 67.00 points higher in the post-Thanksgiving Day trade. Surely in this week there was even more “negotiations” that were “going well” – right? Not so much. Sunday we read from Reuters that the nothing is happening. Is anyone really surprised? Nov 25 (Reuters) - U.S. lawmakers have made little progress in the last 10 days toward a compromise to avoid the harsh tax increases and government spending cuts scheduled for Jan. 1, a senior Democratic senator said on Sunday. The United States is on course to slash its budget deficit nearly in half next year. Closing the gap that quickly, which in Washington is referred to as going over a "fiscal cliff," could easily trigger a recession. "Unfortunately, for the last 10 days, with the House and Congress gone for the Thanksgiving recess ... much progress hasn't been made," Dick Durbin, the No. 2 Senate Democrat, told ABC's "This Week" program. A deadline is looming. Absent action by lawmakers and President Barack Obama, roughly $600 billion in tax increases and spending cuts will start to hit households and companies in early January. Republicans and Obama's Democrats are at an impasse over the president's wish to raise income tax rates on the wealthiest Americans, which Republicans say would hurt job creation. Republicans also want to cut spending on social programs more than Democrats say they will accept. Durbin said Democrats are willing to allow small changes to parts of these entitlement programs, including public health insurance programs for the elderly and poor, but the Social Security government pension program should not be on the table. "Bring entitlement reform into the conversation. Social Security, set (it) aside," Durbin said. The possibility of a deal – with NO DETAILS – was good for 67-handles in the S&P500. Will the reality of no progress remove the fraud rally? LOL!!!! Yeaaahhhh, right. | | Trade well and follow the trend, not the so-called “experts.” | | Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banking mafia. | | | | | | | | | |  | | | | is a leading investment education firm that empowers traders to achieve and surpass their financial goals. More than 50,000 students have used Larry Levin's proven techniques for powerful results. | | | | | |  | | | | Congratulations to Nathan Hudgins Results: "I made +470 today on my first trade of the day...took the sd at 88.04 stopped out at 87.57. Kept moving my stop as you do to the successive high swings" | | | | NOTICE: Testimonials are believed to be true based on the representations of the persons providing the testimonials, but facts stated in testimonials have not been independently audited or verified. Nor has there been any attempt to determine whether any testimonials are representative of the experiences of all persons using the methods described herein or to compare the experiences of the persons giving the testimonials after the testimonials were given. The average reader should not necessarily expect the same or similar results. Past performance is not necessarily indicative of future results. No person was compensated for providing a testimonial. | | | |  | | |  | | | | Volatility Commentary | | | Price, Volume, and Volatility There is a popular topic circulating around in various trading discussion groups. "If you were afforded the use of only three indicators while trading, which would you choose and why?" My answer would be "Price, Volume, & Volatility!"
Pick any one indicator (weapon or tool) from each of the three main categories. I would choose Trend Lines (on a log price scale) to identify the winning side, Volume-at-Price (similar to Market Profile) indicator to identify lines at which battles are being heavily fought by bulls & bears, and finally, Realized Volatility indicator (or Implied Volatility if the underlying has options that trade) to really show the intensity of energy being consumed by each side in fighting the battle.
Price, Volume, & Volatility over Time provide the full, four-dimensional picture of the constant battles being fought in the market place. Remember in trading, being on the winning side goes the spoils. Spoils to the victors (or more accurately to the ones that can consistently identify and side with the victors).
| | |  | | | | Currency Spotlight | | | | Gold is poised to have a record twelfth year of strength, while AUD/USD appears to have a very good chance for a fourth year of gains. The primary arguments for higher commodity instruments will continue to come from investor frustration of earning practically nothing holding U.S. bonds, fear of investing in Europe as uncertainty with how their debt crisis will play out, and the outlook for China is much better than it was a couple months ago, prompting further demand for Australia's commodities. The Australian dollar is slightly stronger than 2.0% on the year against the U.S. currency and further upside appears to be at the mercy of the fiscal cliff and not this week’s rate decision by the RBA or even Greek situation. This week the Australia’s central bank may cut their key cash rate to 3.0% from 3.25%. This rate cut is not a certainty by any means. The fact that Aussie-dollar is still strong this year despite rate cuts lowering the bench mark interest rate from 4.25% to its current levels is a sign that cash flows, investments and diversification from U.S. and Europe will help Australia’s currency climb higher. If weakness is spurred from anticipation of a rate cut, value investors will buy on any serious dips.
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|  | | | | Watch List | | | Today the market action was quite dull for the most part, that is until Mister Ben Bernanke spoke when he took the podium around lunch time. The market swiftly decided that what he had to say was very unfavorable and we saw a very quick slide down. Then sure enough it bounced right at a support level and rebounded to slowly grind its way back up to close right where the market had opened today. In essence it was a sideways day with lighter volume and decent volatility.
We saw some movers in the market today and most notably it was Hewlett Packard(HPQ) announcing they might have uncovered possible fraudulent accounting in the acquisition of the company Autonomy. That has fueled a hard sell off in not only HPQ, but INTC and DELL followed suit. The tech sector gets hit again, and if you are trying to go long in this sector I would say choose wisely because when one goes, the others generally follow suit.
Look for a quiet market tomorrow and if you are considering Friday a day to trade, may I suggest you take a 4 day weekend and look to get it going the following Monday. Unless of course you enjoy almost non-existent volume and very minimal movement in the markets, it's best to relax and worry about fighting people for door buster deals instead. Open Position: CHKP Stocks to Watch: AAPL AMZN GOOG PCLN GMCR NFLX FB BAC C
Now with the market is a fast rally, I had stated that if we trade above 1375.00 on the S&P and close above that price it can be the start of the "rally" into the next year. Of course the rally has to sustain and grow some legs, but it is something to watch going into the end of this wee. It will be interesting to see if we can sustain that price point and how the market reacts from a technical standpoint at that 1375.00 mark. Open positions: CHKP Stocks to Watch: AAPL AMZN IBM GOOG PCLN BAC C NFLX GMCR
| | |  | | | | Futures Data | | | ES 1405.00 / 1396.00 POC… 1401.00 YM 12950 / 12884 NQ 2634.00 / 2617.00
Notes from the Pit
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| | | | | |  | | |  | | |  | | | | Patrick Assalone - Best and Worst Time to Trade | | |  | | | | | | | | IMPORTANT NOTICE: Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. Nothing in our website shall be deemed a solicitation or an offer to Buy/Sell futures and/or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on our site. Also, the past performance of any trading methodology is not necessarily indicative of future results. | | | | DAYTRADING involves high risks and YOU can LOSE a lot of money. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those talked about in our site. | | | | | |
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